By Combs H.B. No. 1905
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to enforcement of a motor vehicle warranty.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 6.07(c), (d), and (h), Texas Motor
1-5 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
1-6 Statutes), are amended to read as follows:
1-7 (c)(1) If the manufacturer, converter, or distributor is
1-8 unable to conform the motor vehicle to an applicable express
1-9 warranty by repairing or correcting any defect or nonconformity
1-10 <condition> which creates a serious safety hazard or substantially
1-11 impairs the use or market value of the motor vehicle after a
1-12 reasonable number of attempts, the manufacturer, converter, or
1-13 distributor shall, at the owner's option (1) replace the motor
1-14 vehicle with a comparable motor vehicle; or (2) accept return of
1-15 the vehicle from the owner and refund to the owner the full
1-16 purchase price less a reasonable allowance for the owner's use of
1-17 the vehicle and any other allowances or refunds payable to the
1-18 owner<. In this section, "impairment of market value" means a
1-19 substantial loss in market value caused by a defect specific to the
1-20 vehicle. In addition to replacing the vehicle or refunding the
1-21 purchase price, the manufacturer, converter, or distributor shall
1-22 reimburse the owner for reasonable incidental costs resulting from
1-23 loss of use of the motor vehicle because of the nonconformity or
1-24 defect. As necessary to promote the public interest, the
2-1 Commission by rule shall define the incidental costs that are
2-2 eligible for reimbursement, shall specify other requirements
2-3 necessary to determine an eligible cost, and may set a maximum
2-4 amount that is eligible for reimbursement, either by type of
2-5 eligible cost or a total for all costs. Refunds shall be made to
2-6 the owner and lienholder, if any, as their interests may appear. A
2-7 reasonable allowance for use shall be that amount directly
2-8 attributable to use of the motor vehicle when the vehicle is not
2-9 out of service for repair. An order to refund or to replace may
2-10 not be issued by the Executive Director against a manufacturer,
2-11 converter, or distributor unless the manufacturer, converter, or
2-12 distributor has been mailed prior written notification of the
2-13 alleged nonconformity or defect from or on behalf of the owner and
2-14 has been given an opportunity to cure the alleged defect or
2-15 nonconformity. In any hearing before the Executive Director under
2-16 this section, a manufacturer, converter, or distributor may plead
2-17 and prove as an affirmative defense to the remedies provided
2-18 hereunder that (1) the nonconformity is the result of abuse,
2-19 neglect, or unauthorized modifications or alterations of the motor
2-20 vehicle; or (2) the nonconformity does not substantially impair the
2-21 use or market value of the motor vehicle. In this section, "serious
2-22 safety hazard" means a life-threatening malfunction or
2-23 nonconformity that substantially impedes a person's ability to
2-24 control or operate a motor vehicle for ordinary use or intended
2-25 purposes or that creates a substantial risk of fire or explosion>.
2-26 (2) A reasonable allowance for use shall be that
2-27 amount directly attributable to use of the motor vehicle when the
3-1 vehicle is not out of service for repair.
3-2 (3) In this section, "impairment of market value"
3-3 means a substantial loss in market value caused by a defect
3-4 specific to the vehicle.
3-5 (4) In addition to replacing the vehicle or refunding
3-6 the purchase price, the manufacturer, converter, or distributor
3-7 shall reimburse the owner for reasonable incidental costs resulting
3-8 from loss of use of the motor vehicle because of the nonconformity
3-9 or defect. As necessary to promote the public interest, the
3-10 Commission by rule shall define the incidental costs that are
3-11 eligible for reimbursement, shall specify other requirements
3-12 necessary to determine an eligible cost, and may set a maximum
3-13 amount that is eligible for reimbursement, either by type of
3-14 eligible cost or a total for all costs. Refunds shall be made to
3-15 the owner and lienholder, if any, as their interests may appear.
3-16 (5) An order to refund or to replace may not be issued
3-17 by the Executive Director against a manufacturer, converter, or
3-18 distributor unless the manufacturer, converter, or distributor has
3-19 been mailed prior written notification of the alleged nonconformity
3-20 or defect from or on behalf of the owner and has been given an
3-21 opportunity to cure the alleged defect or nonconformity after
3-22 receipt of the written notice.
3-23 (6) In any hearing before the Executive Director under
3-24 this section, a manufacturer, converter, or distributor may plead
3-25 and prove as an affirmative defense to the remedies provided
3-26 hereunder that (A) the nonconformity is the result of abuse,
3-27 neglect, or unauthorized modifications or alterations of the motor
4-1 vehicle; or (B) the nonconformity does not substantially impair the
4-2 use or market value of the motor vehicle.
4-3 (d)(1) For purposes of this section, a reasonable number of
4-4 attempts have been undertaken to conform a motor vehicle to the
4-5 applicable express warranties if (A) the same nonconformity has
4-6 been subject to repair three or more times by the manufacturer,
4-7 converter, or distributor, its agent, or its authorized dealer and
4-8 within 24 months or 24,000 miles following the date of original
4-9 delivery to an owner, but such nonconformity continues to exist;
4-10 (B) the same nonconformity creates a serious safety hazard and has
4-11 caused the vehicle to have been subject to repair two or more times
4-12 by the manufacturer, converter, or distributor, or an authorized
4-13 agent or dealer within 24 months and 24,000 miles, but the
4-14 nonconformity continues to exist; or (C) the vehicle is out of
4-15 service for repair for a cumulative total of 30 or more days in the
4-16 24 months or 24,000 miles, whichever occurs first, following the
4-17 date of original delivery to the owner and a nonconformity still
4-18 exists that substantially impairs the vehicle's use or market value
4-19 <There is a rebuttable presumption that a reasonable number of
4-20 attempts have been undertaken to conform a motor vehicle to the
4-21 applicable express warranties if (1) the same nonconformity has
4-22 been subject to repair four or more times by the manufacturer,
4-23 converter, or distributor, its agent, or its authorized dealer and
4-24 two of the repair attempts have been made within a period of 12
4-25 months following the date of original delivery to an owner, or
4-26 12,000 miles, whichever occurs first, and the other two repair
4-27 attempts occur within the 12 months or 12,000 miles immediately
5-1 following the date of the second repair attempt, whichever occurs
5-2 first, but such nonconformity continues to exist; (2) the same
5-3 nonconformity creates a serious safety hazard and has caused the
5-4 vehicle to have been subject to repair two or more times by the
5-5 manufacturer, converter, or distributor, or an authorized agent or
5-6 dealer, and at least one attempt to repair the nonconformity was
5-7 made in the period of 12 months or 12,000 miles, whichever occurs
5-8 first, and at least one other attempt made in the period of 12
5-9 months or 12,000 miles after the first repair attempt, whichever
5-10 occurs first, but the nonconformity continues to exist; or (3) the
5-11 vehicle is out of service for repair for a cumulative total of 30
5-12 or more days in the 24 months or 24,000 miles, whichever occurs
5-13 first, and at least two repair attempts were made in the first 12
5-14 months or 12,000 miles immediately following the date of original
5-15 delivery to an owner and a nonconformity still exists that
5-16 substantially impairs the vehicle's use or market value. The
5-17 initial 12-month period or 12,000 mile limit, the subsequent
5-18 12-month period or 12,000 mile limit, and the 30-day period shall
5-19 be extended by any period of time during which repair services are
5-20 not available to the owner because of a war, invasion, strike or
5-21 fire, flood, or other natural disaster. During any period of time
5-22 that the manufacturer or distributor lends a comparable motor
5-23 vehicle to the owner during the time the vehicle is being repaired
5-24 by an authorized dealer, the 30-day period provided for in this
5-25 subsection is tolled>.
5-26 (2) In this section, "serious safety hazard" means a
5-27 life-threatening malfunction or nonconformity that substantially
6-1 impedes a person's ability to control or operate a motor vehicle
6-2 for ordinary use or intended purposes or that creates a substantial
6-3 risk of fire or explosion.
6-4 (3) The initial 12-month period or 12,000 mile limit,
6-5 the subsequent 12-month period or 12,000 mile limit, and the 30-day
6-6 period shall be extended by any period of time during which repair
6-7 services are not available to the owner because of a war, invasion,
6-8 strike or fire, flood, or other natural disaster.
6-9 (4) During any period of time that the manufacturer or
6-10 distributor lends a comparable motor vehicle to the owner during
6-11 the time the vehicle is being repaired by an authorized dealer, the
6-12 30-day period provided for in this subsection is tolled.
6-13 (5) Written notice to the manufacturer, converter, or
6-14 distributor shall occur after a reasonable number of attempts as
6-15 defined under Subsection (d)(1) of this section to correct the
6-16 defect, nonconformity, or condition have been made. The written
6-17 notice may be sent to the manufacturer, converter, or distributor
6-18 by the owner, the dealer, or the Commission. Upon receipt of the
6-19 written notice, the manufacturer, converter, or distributor shall
6-20 be given: (A) 21 days to cure the defect, nonconformity, or
6-21 condition following three attempts to repair; (B) 10 days to cure
6-22 the defect, nonconformity, or condition following the 30 day period
6-23 in which the car was not available to the owner due to repairs; and
6-24 (C) seven days to cure the defect, nonconformity, or condition
6-25 following the second attempt to repair a serious safety hazard.
6-26 The manufacturer's, distributor's, or converter's opportunity to
6-27 cure the defect, nonconformity, or condition shall not be included
7-1 in determining whether a reasonable number of attempts have been
7-2 made to cure the defect, nonconformity, or condition. An
7-3 manufacturer, converter, or distributor unless the manufacturer,
7-4 converter, or distributor has received the written notice required
7-5 under this section and is given the opportunity to correct the
7-6 defect, nonconformity, or condition as required by this section.
7-7 (6) The Commission shall prescribe a notice informing
7-8 the owner of the obligation to send written notice of the defect,
7-9 nonconformity, or condition to the manufacturer, converter, or
7-10 distributor. The notice shall be:
7-11 (A) on lemon yellow paper;
7-12 (B) given to the owner at the time of purchase
7-13 by the seller;
7-14 (C) prominently displayed at the dealer's
7-15 maintenance service desk; and
7-16 (D) prominently displayed where payment is
7-17 normally made for repair services.
7-18 (h) A proceeding brought under this section shall be
7-19 commenced within six months following the earlier of (1) expiration
7-20 of the express warranty term, <or> (2) 24 months following the date
7-21 of original delivery of the motor vehicle to an owner, or (3)
7-22 24,000 miles following the date of original delivery of the motor
7-23 vehicle to an owner. An order by the Commission to replace or
7-24 repurchase a new motor vehicle under Subsection (c) of this section
7-25 may only be made on or before the earlier of 36 months following
7-26 the date of original delivery of the motor vehicle to an owner, or
7-27 36,000 miles following the date of original delivery of the motor
8-1 vehicle to an owner. If the Commission has not acted on a timely
8-2 filed complaint prior to the expiration of the earlier of 36 months
8-3 or 36,000 miles, the Executive Director shall, in writing sent by
8-4 certified mail, inform the complainant and manufacturer, converter,
8-5 or distributor of this failure to timely meet the constraints
8-6 contained herein. Further, the Executive Director shall inform the
8-7 complainant of his right to file a civil action against the
8-8 manufacturer, converter, or distributor. The Commission shall
8-9 extend the period from the earlier of 36 months or 36,000 miles
8-10 period for an additional 60 days upon receipt of a written request
8-11 by complainant requesting such extension. Further, the complainant
8-12 will receive an additional 2,000 miles of use to cover the 60 day
8-13 extension period.
8-14 SECTION 2. The change in law made by this Act applies only
8-15 to a proceeding brought under Section 6.07, Texas Motor Vehicle
8-16 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
8-17 on or after the effective date of this Act. A proceeding brought
8-18 before the effective date of this Act is covered by the law in
8-19 effect when the proceeding was brought, and the former law is
8-20 continued in effect for that purpose.
8-21 SECTION 3. This Act takes effect September 1, 1995.
8-22 SECTION 4. The importance of this legislation and the
8-23 crowded condition of the calendars in both houses create an
8-24 emergency and an imperative public necessity that the
8-25 constitutional rule requiring bills to be read on three several
8-26 days in each house be suspended, and this rule is hereby suspended.